An assessment of the effects of demand response in electricity markets

Abstract

SUMMARY In this paper, we present a method for assessing the impacts of demand–response (DR) programs on the load profile and the market prices, which can be recognized directly in terms of the demand elasticity (DE). The method simulates the effects of the DE arising from the DR programs on the liberalised wholesale electricity market. The influence of DR programs on the DE in the market is estimated, and then the impact of the DE on the load profile and the market prices is simulated using the day‐ahead market‐simulation tool by calculating a new market equilibrium point. The model is more suitable for initial planning stages of the DR programs and could be used to assess what levels of elasticity would be necessary to achieve the desired levels of DR and savings. The proposed method was illustrated on the centralized Slovenian electricity market. The results indicate that an increased DE leads to a lower demand for electricity, leading to significant reductions in the electricity price on the market. The method provides policy designers and investors in DR programs with a quick and effective way to estimate the market effects of these programs. Copyright © 2012 John Wiley & Sons, Ltd.

Reliability-based nodal evaluation and prioritization of demand response programs

“…In this approach, ISO directly manages the load reductions. On the other hand, in the second approach, DR programs are models as the response of demand side to the market conditions [8,9,12,13,[23][24][25]30]. In this case, ISO indirectly manages the load reductions using the market signals such as the electricity price and the program's incentive and penalty.…”

“…From the consumer point of view, literatures have modeled DR programs by price elasticity of demand [8,9,30] or in a more efficient way, using elasticity, incentive, and penalty of DR programs [12,13,[23][24][25]. The authors in [8,9] have modeled the demand-side load shifting behavior through demand-price elasticity matrix.…”

Agent-based modeling of the demand-side system reserve provision

“…A field of the demand response (DR) proposes a solution to this problem by introducing various demand response programs that could help enhance the demand-side participation at the electricity market [2,3]. In addition to a consumers' natural response to changes in electricity price, they may also be able to additionally modify their normal consumption in order to participate in the system reserve market [4].…”

Load-shift incentives for household demand response: Evaluation of hourly dynamic pricing and rebate schemes in a wind-based electricity system

“…Analyses with a short-term focus have been carried out examining real-time or day-ahead pricing (e.g. in the US [37][38][39], the UK [40,41], Slovenia [42] or Denmark [43]), time-of-use and critical peak pricing [44,45] as well as incentive-based response schemes [46,47]. A short-term equilibrium approach provides a bit more insight into the market dynamics of demand response.…”